Center for Arms Control and Non-Proliferation

An Exercise in Futility: State Department 'Democracy Promotion' Funding for Iran

by Carah Ong [contact information]

April 22, 2008

BACKGROUND

The State Department says the purpose of its so-called "democracy promotion" fund in Iran is to support programs that "assist those inside Iran who desire basic civil liberties such as freedom of expression, greater rights for women, more open political process, and broader freedom of the press." On the surface this seems like a noble goal. However, the program is universally rejected by its intended recipients in Iran because it has undermined their work for democracy and reform.

Iranian authorities have used the Bush administration's regime change slush fund as a pretext to clamp down on Iran's civil society with thousands of arrests. The State Department has said that information regarding who receives the money and what it is used for should remain classified in order to protect those who receive it. However, the secrecy surrounding the distribution of these funds has created immense problems for Iranian reformers and human rights activists. Aware of their own deep unpopularity, the hardliners in Iran are terrified by the prospect of a "velvet revolution" and have become obsessed with preventing contacts between Iranian scholars, artists, journalists and political activists and their American counterparts. Enterprising Iranians are being accused by their government of taking money from the U.S. government and acting as spies.

Referring to the so-called "democracy promotion" program, activists and dissidents in Iran believe that democracy in Iran doesn't need money and that the fund has only undermined their work for reform. In an op-ed for the International Herald Tribune on May 30, 2007, Nobel Peace Laureate Shirin Ebadi and Muhammed Sahimi aptly explained the situation:

The recent arrests, including the detention of Hossein Mousavian, a former nuclear negotiator and a close aid to Rafsanjani, should be viewed as Ahmadinejad's retaliation against the more moderate faction. But the most important reason has to do with President George W. Bush's policy toward Iran. Last year, the administration requested and received $75 million from Congress to 'bring' democracy to Iran.

Some of the $75 million has been devoted to the U.S.-funded Radio Farda, Voice of America and Radio Free Europe, as well as to VOA satellite TV, which are beaming Persian programs into Iran. Other portions have been given secretly to exiled Iranian groups, political figures and nongovernmental organizations to establish contacts with Iranian opposition groups.

In an October 2007 Chronicle of Higher Educationarticle, Woodrow Wilson Center Middle East Program Director Haleh Esfandiari, who was incarcerated in Tehran's Evin prison for several months on allegations of endangering Iranian national security, and Wilson Center International Security Studies Director Robert Litwak wrote about the unintended consequences of U.S. "democracy promotion" policies. According the authors:

U.S. law places formidable restrictions on the ability of American NGO's to operate in Iran. Meanwhile, while eschewing official contact, the United States attempts to financially support Iran's own nascent NGO's so that they can become agents of change within the society. Yet this program of democracy promotion has had the unintended consequence of further reducing the political space for open debate in Iran. In this new climate of intimidation, NGO's and journalists are subject to censorship and are defensively engaging in self-censorship. Prominent Iranian activists, such as the Nobel laureate Shirin Ebadi, declared their opposition to the U.S. program because of continued sensitivity about foreign, particularly American, intrusion in Iran's domestic politics. The fact that the identity of Iranian recipients of U.S. aid is regarded as classified information by the U.S. government feeds the regime's paranoia and casts suspicion on all Iranian NGO's.

Suzanne Maloney, who was on the policy planning staff at the State Department for two years, said the following regarding democracy assistance funds:

I was worried about the safety of those on the receiving end of the funds. But I also just wondered if this was feasible. I don't see how a U.S. government that has been absent from Tehran for 30 years is capable of formulating a program that will have a positive effect...You had to wonder where this money was going to go and what's going to happen when you don't have the time to sit down and sift through the more questionable proposals. There's just not enough oversight. Of the 100 or more preliminary proposals I saw under the first call, it was an enormous challenge to find anything viable. This may have been a very high profile, sexy project, but the likelihood of real impact was minimal.

WHY DEMOCRACY PROMOTION FUNDING SHOULD BE ELIMINATED

Iranian reformists believe that democracy can't be imported.
It must be indigenous. They believe that the best the United States can do for democracy in Iran is to leave them alone. The fact is, no truly nationalist and democratic group will accept such funds.

Noninterference in Iran's domestic affairs is a legal obligation of the United States.
This was stipulated in the Algiers Accord that the United States signed with Iran in 1981 to end the hostage crisis.

The U.S. policy of "helping" the cause of democracy in Iran has backfired and made it more difficult for the more moderate factions within Iran's power hierarchy to argue for rapprochement with the West.
The secret dimension of the distribution of $75 million has created immense problems for Iranian reformists, democratic groups and human rights activists. Aware of their own deep unpopularity, the hard-liners in Iran are terrified by the prospects of a "velvet revolution" and have become obsessed with preventing contacts between Iranian scholars, artists, journalists and political activists and their American counterparts.

FISCAL YEAR 2009 BUDGET REQUEST

The U.S. Department of State Summary and Highlights of the Fiscal Year (FY) 2009 International Affairs budget request (also known as Function 150) reveals details regarding Iran-related funding in the Economic Support Fund line item. For FY 2009, the Statement Department is requesting $65 million in Economic Support Funds for Iran (page 79). This is more than three times the amount appropriated for FY 2008, which is estimated to be $21.623 million.

This tripling in Economic Support Funds is the result of several developments. First, some restructuring recently occurred in the State Department and its Iran desk. Second, the FY 2008 Foreign Operations bill appropriated $60 million (under Section 693) for so-called "Programs to Promote Democracy, Rule of Law and Governance in Iran." It has been unclear since Section 693 was originally added as an amendment introduced by Rep. Ander Crenshaw (R-FL) to the House Foreign Operations Appropriations bill for exactly which programs this funding was meant. Was it meant to increase funding for the Economic Support Fund or the Human Rights and Democracy Fund? Or was it meant to serve as an overall guideline for total spending on so-called "democracy promotion" programs? This is still a question that needs to be answered.

The tripling in the request for the Economic Support Funds either indicates that the State Department recognizes that Congress supports this program and it can get additional funds for it, or that the State Department is trying to streamline so-called democracy assistance funds through the Economic Support Fund line item.

While the FY 2009 Summary and Highlights does not state exactly how much of the International Broadcasting Operations funds ($654 million requested) will be devoted to Iran, it does note that funds will be used to launch Radio Free Europe/Radio Liberty Azerbaijani broadcasts to Iran. It is also unclear how much of $522 million in requested funding under the Educational and Cultural Exchange Programs will be allocated to Iran-related programs, but the funding will "provide new opportunities for American students to learn critical need languages." In addition to four other languages, the initiative focuses on Farsi.

FISCAL YEAR 2008 BUDGET REQUEST

On December 19, 2007, Congress passed an omnibus appropriations bill which included the consolidated State, Foreign Operations, and Related Programs Appropriations Act for FY 2008. The bill provides for $60 million to be made available for "programs to promote democracy, the rule of law and governance in Iran." The explanatory statement accompanying the bill specifies only two numbers with respect to Iran: $21.8 million for Economic Support Funds (ESF) and $8 million for the Democracy Fund. The remainder of the $60 million is embedded in other accounts and amounts are not specified. The final appropriation was nearly halved from President Bush's February 2007 budget request of $108.71 million, which was comprised of $75 million for Economic Support Funds (ESF), $28.21 million for the Broadcasting Board of Governors (BBG) Voice of America - Persian and Radio Farda programs and $5.5 million in Diplomatic and Consular Program (D&CP) funds.

FISCAL YEAR 2006 FUNDING

In the regular FY 2006 Foreign Operations spending bill, Congress appropriated no less than $6.55 million (Public Law 109-102) for Iran from Democracy Funds and requested that at least $10 million be spent by the State Department on democracy and human rights programs in Iran overall. Secretary of State Condoleezza Rice also requested $75 million in the FY 2006 Emergency Supplemental for Iran. Congress only appropriated $66.1 million, allocated as follows (Public Law 109-234):

• $36.1 million for the Broadcasting Board of Governors (BBG)
• $10.274 million in International Broadcasting Operations
• $25.826 million in Broadcasting Capital Improvements
• $20 million for democracy programs in Iran through the Middle East Partnership Initiative in the Bureau of Near Eastern Affairs
• $5 million for Internet and other interactive programming through the Bureau of International Information Programs
• $5 million for education and cultural exchanges through the Bureau of Educational and Cultural Affairs.

According to a June 2007 report, the State Department had only obligated approximately $16.05 million for Iran democracy programs from its FY 2006 regular and supplemental budgets, which included $11.9 million through MEPI and $4.15 million through the Bureau of Democracy, Human Rights and Labor. Additionally, $1.77 million has been obligated through the Bureau of International Information Programs, and $2.22 million through the Bureau of Education and Cultural Affairs from the FY 2006 regular and supplemental budgets.

POLICY RECOMMENDATIONS

1. Congress should request a Government Accountability Office report evaluating the usefulness of Iran democracy promotion funding.
2. Congress should require the President to submit quarterly reports accounting for all government funding relating to Iran, including all funding in support of pro-democracy groups and of "regime change" in Iran.
3. Congress should reduce or eliminate all "democracy promotion" funding for Iran.
4. Congress should reverse the U.S. policy of regime change towards Iran.
5. Congress should require study to determine the content and effectiveness of U.S. broadcasting into Iran.